Bank and super app wannabe, Brazil's Inter doubles its user base and relies on Stone and other partners to speed monetization

Of this total, 2.1 million are active users of the Inter Shop, Inter's marketplace, and the key operation to increase its app's recurrence and TPV

Brazilian neobank Inter, headquarters
Photo: Inter/Courtesy
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  • More than just accounts, what matters for Inter is to grow in recurrence and TPV, that is, to make its 12 million customers effectively use the app on a daily basis;
  • In this sense, in addition to Inter Shop, the app’s marketplace, the company bets on its credit (and cards) and insurance fronts for that as well.

Inter (formerly Banco Inter) reached the end of June with 12 million customers, an increase of 18% over the previous quarter and double what it had in the same month last year. Between April and June, the company won 1.9 million accounts, opening around 30,000 per business day. But more than just accounts, what matters for Inter now, in its quest to go from digital bank to super app, is to grow in recurrence and TPV, in other words, making these 12 million customers effectively use the app on a daily basis.

This is where another important branch of the company comes in: the Inter Shop, Inter’s marketplace. According to the company, BRL 774 million were transacted on its marketplace during the second quarter, an increase of 531% over the same period last year. The number of sales made by Inter Shop also grew (tripled, actually), to 5.2 million. In the second quarter, the company managed to attract 423,000 of its users to Inter Shop. In all, Inter’s marketplace already has 2.1 million active customers.

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Alexandre Riccio de Oliveira, vice president of Inter, and Helena Lopes Caldeira, CFO and head of investor relations, told analysts that Stone‘s BRL 2.5 billion investment, announced in May as an anchor for the follow-on on which the company raised BRL 5.5 billion, is resulting in commercial partnerships that can enhance the reach of Inter Shop, and that the results of this will be seen in the coming months. Stone is one of the main acquirer and payments company in Brazil.

When answering an analyst about what it would take to make Inter Shop take off, President João Vitor Menin said that the company is constantly “brainstorming” about how much to invest in marketing and cashback to accelerate this growth. “Cashback is very much thought of as a marketing expense for us because the [Inter Shop’s] experience is already the best online shopping experience in the market. On Inter Day [the shopping event that Inter Shop promoted for the second time this year, reaching BRL 96 million in GMV], we invested heavily in this. On other verticals, including logistics, we see that there are companies that do all this very well. So it would make more sense to make B2B partnerships with these companies [than build something indoors],” Menin said.

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But Inter’s diversification of verticals and products goes far beyond that. The investment (Inter Invest) and insurance (Inter Seguros) areas are important verticals in this sense.

Inter ended June with 532,000 policyholders, with revenues that tripled compared to the second quarter of last year, to BRL 21.6 million. Inter Invest’s operation ended the second quarter with BRL 63.5 billion in custody, 140% more than in the same period last year, and with 1.7 million active clients.

Inter’s credit origination between April and June totaled BRL 4.8 billion, a 212% increase compared to the same period last year and 29.7% quarterly. To analysts, Menin said that Inter’s growth potential in this area is clear. “When we look at [our penetration] in PIX [Brazil’s new instant payment method], we have 10%. When we look at home equity, we have less than 1% payroll-deductible loans, again, less than 1%… But we have know-how and capital (60% Basel), so I would say that’s given. [This growth in credit operations] It’s something that’s given. So you’re going to see a very big growth in credit in the next few years,” he said.

Inter’s president also said that expanding the operation with cards, something the company has been doing, was what was needed to make the app’s account more complete. According to him, this is what should leverage credit growth on a daily basis. Inter handled BRL 9.4 billion in cards in the second quarter of 2021, 24.4% above the previous quarter and more than triple the same period last year. For him, this will help the average value of Inter customers’ deposits rise more in the coming months. “We are talking about an expanded portfolio, other related products, not rotating credit [which has huge interest rates in Brazil],” said Menin.

In the second quarter of this year, the average deposit of Inter customers was BRL 1,300, higher than the BRL 1,117 in the previous quarter.

All this business diversification required Inter to increase its staff. There are more than 3,100 employees now. “Our main asset is people; they are the ones who make us launch new products, improve product cross-selling, day after day.”

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